We are seeing about 20 per cent less sales compared to last year due to multiple reasons like strong dollar, low oil prices, regional political instability and low tourist inflows,” said Deepak Babani, CEO of Eros Group.

“We never expected sales in December to drop so badly. The slowdown started right from June,” he said. “All the issues have come together amid low consumer confidence. Even hotels have reported low occupancy rates. This is the first time in many years I am hearing that all the retail segments are seeing a slowdown, including luxury segments.”

But for Sheriff Rizwan, CEO and founder at AlShop.com, this December is better when compared to the same period last year due to e-commerce picking up significantly this year.

“The offline market has seen a 30 per cent dip in volume. People are sensitive in how they spend and where they spend. They are doing their homework correctly to save for a better necessity,” he said.

Babani said his friends in the luxury sectors [watches, bags, clothes] who are saying that they are seeing around 40 per cent fall in sales. Asked why online retailers are seeing an increase, he said that the number of people moving from offline to online is “very small”.

“Do you think 20 per cent of the sales would have moved online? Never, may be two to four per cent,” he said.

Shopping festival

Mahesh Chotrani, assistant vice-president at Jacky’s Electronics, said that footfalls have been down at the malls and it is one of the slowest Decembers ever witnessed.

“November was quite decent and I am not sure whether it is due to the low consumer confidence or people are waiting for the Dubai Shopping Festival. Christmas was not encouraging for Chotrani, as it should have been “and we haven’t seen any growth compared to last year,” he said.

Retail sales have been slowing down right from June, but he said that somehow “we were managing it”.

Despite brick and mortar sellers taking a hit, Omar Abushaban, general manager of Plug Ins, said that sales in the UAE this year are up eight per cent compared to the previous year.

However, online retailers are in buoyant mood as sales in December have grown better than November.

“December has been as strong as November. In November, we had Black Friday and Cyber Monday so sales were strong. We expect to do better than November,” said Omar Kassim, CEO of online marketplace JadoPado.com.

For JadoPado, iPhones, iTunes Gift Cards, Android smartphones and hoverboards or self-balancing electric scooters are the best sellers.

Retail market growth

Diana Jarmalaite, research analyst at Euromonitor International, said that the UAE retail market, valued at $49.8 billion (Dh183 billion) this year, is expected to register a year-on-year growth of 8 per cent this year compared to 2014. The growth is likely to be driven by the expansion of online and grocery retailing.

According to the data from Euromonitor International, the retail market is forecast to grow to $53.7 billion in 2016 and $67.5 billion in 2019.

“Store based non-grocery retailing is estimated to report lower growth rates [in 2015]. Within the store based retailing, luxury retailing has remained almost flat, while economy-priced brands have boosted their popularity among consumers,” Jarmalaite said.

Vipen Sethi, chief executive of Landmark Group, said that they have seen a “modest growth” in sales this month compared to the same period last year. The group has been growing its e-commerce presence and loyalty programme to drive sales in the UAE.

Parag Mehta, head of operations at LetsTango.com, said that December is usually the highest revenue earning month. Even though many residents are out of town on holidays, “we are getting decent orders from tourists who are in Dubai to celebrate [the holidays]. We have deliveries to hotels in the UAE from Russian and Indian tourists who don’t have time to go to malls and shopping. We have got orders from Ras Al Khaimah hotels,” he said.

Unlike any other month where smartphones used to steal the limelight, he said that this month it is the gift categories for babies, kids and toys. This category is the top, followed by perfumes, and Star Wars products such as T-shirts, caps and gadgets.

Lifestyle category

Consumers this holiday season are spending money on products such as consumer electronics, toys, hoverboards and books, retailers say. Nisreen Shocair, president of Virgin Megastore Middle East, said that Magnatiles, which are magnetic buildings tiles for children, drawing books and vinyl players [record players] are currently some of the best-selling items.

“In the gift and lifestyle category, we’ve seen double digit growth [this year] across all our stores within the UAE. This is due to the new direction we’ve taken introducing exclusive products within toys, housewares and fashion,” Shocair said.

Mary Ghobrial, chief commercial officer at Souq.com, said that October, November and December are among the strongest months in the year. “We are witnessing the same trend this year also and significant growth over the last year. The sales have been going strong post White Friday too. I think the White Friday effect combined with the overall holiday and gifting mood has furthered sales on our platform,” she said.

Analysts expect slowing sales growth to continue next year.

“As along as oil prices stay this low there will continue to be an overall sense of caution which will result in tighter budgets for residents. Daily needs sectors — such as food, basic clothes, necessary services — will be fine, but we will see further weakness in non-essentials such as luxury, lifestyle and entertainment,” Beaton said.

Jarmalaite expects retail sales growth in the UAE to decline 7 per cent next year.